[Asia Economy Reporter Ki-min Lee] The labor and management of Ssangyong Motor, which is facing a deepening liquidity crisis, are reported to have agreed to delay part of the wages for January and February.
According to industry sources on the 23rd, Ssangyong Motor held a union delegates meeting the day before and agreed to delay partial salary payments. An industry official stated, "During yesterday's meeting, discussions were held regarding Ssangyong Motor's liquidity situation, and only the deferment of wages for January and February was decided."
The management delivered an official letter to the union on the 21st, stating, "Due to the liquidity crisis, it is difficult to pay normal wages for January and February," and proposed "to hold labor-management consultations." Accordingly, the labor and management held a meeting from the morning of the previous day to listen to the management's explanation.
After Ssangyong Motor filed for corporate rehabilitation with the court on December 21 last year, some suppliers refused to deliver parts fearing they would not receive payment. As a result, Ssangyong Motor suspended operations at the Pyeongtaek plant twice.
Major domestic parts suppliers such as Hyundai Mobis resumed supply, but some companies still officially refused to extend delivery contracts. Ssangyong Motor is receiving parts from them by paying cash on a daily basis.
Despite these efforts, Ssangyong Motor is struggling to overcome the liquidity cliff. Amid chaotic sale negotiations due to disagreements among parties, many promissory notes for parts payments issued to suppliers by Ssangyong Motor in November last year are reportedly maturing on the 29th.
Mahindra, which currently holds 74.7% of Ssangyong Motor's shares, and the U.S. automobile distributor HAAH are conducting final negotiations for the sale of Ssangyong Motor.
Industry insiders predict that if the sale contract is signed within this month, HAAH's capital injection and support from the Korea Development Bank will be carried out, allowing Ssangyong Motor to put out the urgent fire.
However, it is reported that there are disagreements over the scale of capital reduction by Mahindra, the acquisition price, and payment guarantees for Ssangyong Motor's debts after the sale.
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